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January 08, 2020 08:38 PM

Industry officials expect ‘interesting' year ahead

Miles Moore
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    WASHINGTON — 2020 will be a "very interesting year," according to Anne Forristall Luke, president and CEO of the U.S. Tire Manufacturers Association (USTMA).

    Ms. Luke's remark was a humorous understatement that only underscored her absolute seriousness in making it.

    There is little question that other association officials — Roy Littlefield III, president and CEO of the Tire Industry Association (TIA); Roy Littlefield IV, TIA director of government affairs; Bill Hanvey, president and CEO of the Auto Care Association (ACA); and Robert L. Redding, Washington representative for the Automotive Service Association (ASA) — are in agreement.

    Between the November election and the continuing furor over President Donald Trump's impeachment, the legislative agenda for any business association will have a difficult time getting more than a cursory hearing.

    "It's an unusual time in Washington, because of the impeachment and a divided Congress," Mr. Littlefield III said. "It will be difficult for anything to get through."

    However, all the association officials contacted by Tire Business for this outlook said they believed they could achieve progress through diligent lobbying and industry friends on Capitol Hill. Achieving progress, they said, is especially crucial in four areas: infrastructure; tire registration and recalls; recycling/sustainability; and data access.

    Infrastructure

    The Fixing America's Surface Transportation (FAST) Act, signed by President Barack Obama in 2015, sunsets with the end of the 2020 fiscal year at the beginning of October.

    This makes passage of a new infrastructure funding bill imperative, the officials said, but it is unclear whether a divided Congress can decide on a funding package, let alone on what that package might contain.

    There are two proposals for infrastructure reauthorization before Congress, according to Messrs. Littlefield III and Littlefield IV.

    The first is to reauthorize the Highway Trust Fund at the current rate of taxation, they said.

    The second, America's Infrastructure Act of 2019, seeks to address all U.S. infrastructure — not only roads and bridges but also hospitals, schools and electric grids.

    The total cost of the plan, they said, could be as high as $15 trillion to $25 trillion, with money allocated to key congressional constituents.

    "It's kind of like socialized medicine," Mr. Littlefield III said.

    The biggest problem with America's Infrastructure Act is that it would almost certainly require highway users to pay a wildly disproportionate share of the cost, they said.

    One funding proposal would have the federal government turn over 47,000 miles of interstate highways to the states, they said. In previous such cases, states usually have leased those roads to private corporations for 99 years.

    To date there are approximately 800 privatized roads and 200 privatized bridges in the U.S., according to Mr. Littlefield III. The privatized bridges alone, he said, have tolls ranging from $14 to $20.

    "If more roads are privatized, two things are sure to happen: tolls will go up, and maintenance will go down," he said.

    Other proposals include raising the fuel tax by up to $1 per gallon and re-establishing the federal excise tax on passenger tires and tread rubber.

    "The highway community will be hit hard. This is going to be such a burden on truckers," he said. "And in turn this will be a burden on consumers, because all our goods move by truck."

    The USTMA, according to Ms. Luke, is looking at the infrastructure question at a somewhat different angle: sustainability.

    "We're looking for ways to make tires better, and to work with our partners to make highways better," she said. "We want to learn how to support the next generation of sustainable infrastructure."

    With the FAST Act up for reauthorization, Ms. Luke said, the USTMA has an opportunity to meet with its legislative champions "to look ahead on how to use infrastructure policy to pursue sustainability goals."

    Tire registration, recalls

    For the past three years, TIA and the USTMA have worked together on developing a collaborative proposal to the National Highway Traffic Safety Administration (NHTSA) on how to improve tire registration and recall rates.

    Ms. Luke said she recently had a productive conversation on tire registration with new TIA President Brian Rigney. She said she hoped to have another meeting of the task force on this issue in the first quarter of 2020.

    "Our mutual interest is to have a joint proposal for NHTSA in the coming year," she said.

    The goal, according to Mr. Littlefield IV, is to find as many points of agreement as possible between tire makers and tire dealers.

    "There are so many layers to this," he said.

    Small tire dealers especially have a lot at stake in a mutual tire registration agreement because of the potentially ruinous NHTSA fines for noncompliance, Mr. Littlefield III said.

    "Our guys are scared to death," he said. "They had no idea the fines had gone up so much."

    TIA members passed a resolution at the association's annual meeting in November proposing that NHTSA fines for registration violations not be issued until after two written warnings, and then not exceeding $500 for the third offense and $1,000 for subsequent violations.

    Current NHTSA regulations allow fines of up to $22,329 per violation, to a maximum of $105.9 million per location, according to the resolution.

    The current tire registration rate is 85% to 90%, Mr. Littlefield III said, but something must be done to help small dealers with compliance. Because they depend mostly on mail-in registration cards rather than computerized systems, their registration rates hover at the 10% to 15% level, he added.

    Recycling/sustainability

    At its latest scrap tire conference in December, the USTMA called for a 100% recycling rate for end-of-life tires. This, according to Ms. Luke, is very much part of the association's sustainability efforts, which are in line with the Tire Industry Project of the World Business Council for Sustainable Development.

    The USTMA issued its first-ever sustainability report in 2019, and in 2020 it will issue a "Sustainability Vision 2.0" report, refining and expanding its sustainability efforts, she said.

    One new feature in 2020 will be a website targeted at bringing information about the tire industry and its sustainability efforts to legislators, regulatory officials, non-government organizations, academia and other interested parties, she said.

    The USTMA and its members are working to develop contacts outside the tire industry to gain new insights and feedback into sustainability, according to Ms. Luke.

    "We want to look outside our industry to ask what we should be talking about," she said.

    The scrap tire conference was symbolic of the USTMA's efforts in that area, which began in 1991 under the Rubber Manufacturers Association, according to Ms. Luke. The conference had more than 240 attendees, including regulatory officials from 38 states.

    The USTMA is working with the states to increase and maximize use of rubber-modified asphalt, she said, and is promoting a recent study that shows rubber-modified asphalt mitigates roadway abrasion.

    The association also seeks to educate officials on both the federal and state levels and has ongoing efforts to counter efforts in California to limit zinc, a crucial ingredient in tires, she said.

    It also continues to monitor efforts in California, Oregon and Washington to establish regulations regarding tire particles in the environment.

    "It's important for us to make sure legislators and regulators know about our industry," she said. "We want to be a credible resource on any area that relates to tires."

    TIA is watching state legislation that would define crumb rubber athletic turf as a hazardous waste, because that would establish recycling requirements impossible for small retailers to meet, Mr. Littlefield IV said.

    TIA helped fight passage of one such bill in Maryland in 2019, he said, but the same bill will be reintroduced in 2020, and a lot of states will follow suit.

    Telematics/autonomous vehicles

    Data access for repair and diagnostic purposes is an overriding issue for auto repairers, and the rise of telematics and autonomous vehicles has complicated that issue exponentially, according to Messrs. Hanvey and Redding

    The ACA launched a "Your Car, Your Data, Your Choice." campaign last year and will continue to push that agenda in 2020, Mr. Hanvey said.

    "The access to vehicle data and the consumer's right to decide where that data is being sent — that's our priority for this year."

    To ensure action on that front, the ACA is supporting data access legislation at both the federal and state level, he said, acknowledging that action is far more likely on the state level, particularly in Massachusetts where a revision of the state's Right to Repair (R2R) law, to include access to data generated by telematics and autonomous vehicles, is in the works.

    An R2R ballot initiative proved overwhelmingly successful in Massachusetts in 2016, and the state is prepared to place the revision on the ballot in 2020, Mr. Hanvey said.

    "But we are pursuing legislative action to eliminate the need for a ballot initiative," he said. "What we really want is an agreement with the auto makers, but so far they are unwilling to negotiate on this.

    "We have come to the table with a technical solution, which they asked us to do. We have demonstrated we have a solution that works technologically to answer the question of cybersecurity, based on standards used today."

    The ACA also wants to have federal legislation on data access introduced, even though in 2020 it will be "a long shot," Mr. Hanvey said.

    "Once the Massachusetts bill gets passed, we would like to go back to the federal side and have them piggyback on that."

    Among other government initiatives, the ACA supports approval of the USMCA, which will guarantee market access for ACA members to North American markets. The trade group also supports a trade agreement with China.

    "The Section 301 tariffs from China have caused a tremendous amount of turmoil in our industry," Mr. Hanvey said. "Are prices going up? Are there alternative sources? It's better off for the industry just to know what's going to happen.

    "What we need most is an enforceable intellectual property agreement with China, in order to offer the public safe, affordable repair parts."

    Another high-priority issue for the ACA in 2020 will be to help the industry ensure it will have the personnel and expertise to repair the next generation of cars.

    Mr. Hanvey praised the Trump administration's support of apprenticeship programs.

    "A robust apprenticeship program will be necessary to meet the technological challenges of the future," he said,

    Related to this, the development of the next generation of leaders for the auto care industry through the Young Auto Care Network Group (YANG) and the Women in Auto Care community will remain a high priority for the ACA.

    It also will emphasize the engagement of ACA members with their elected officials, especially in the form of visits to ACA member shops and businesses, Mr. Hanvey said.

    "They can get to know our industry and see people providing jobs and revenue to our economy," he said.

    The ACA also has plans to expand both the offerings and the attendance at the annual Automotive Aftermarket Products Expo (AAPEX), held every November in Las Vegas, according to Mr. Hanvey.

    "Now that we have expanded exhibition space, we can increase our emphasis on shop owners, and encourage them to come to AAPEX and become part of our community," he said.

    For the past six years, the ASA has sponsored technology and telematics forums in partnership with the Alliance of Automobile Manufacturers (AAM), Mr. Redding said. Those forums feature key policy leaders in the telematics field, including the top cybersecurity expert at Ford Motor Co. at the forum earlier this year, he said.

    "They are very open about working with us," he said. "We continue to talk to them on the path forward about data access."

    The goal is to ensure that electronic vehicle data is not only accessible, but also affordable for small repair shops, he said. "Our shops operate on a thin margin."

    While mechanical shops have issues with data access, the problem is even more acute for collision facilities.

    "Say that someone knocks the side window off your truck," he said. "It's no longer a matter of just putting a new one back on. Mechanical shops deal with data access post-warranty, but collision shops get those issues from Day One."

    While the ASA seeks an agreement with auto makers on data access, it also looks toward federal or state legislation on that issue, Mr. Redding said.

    There are three legislative paths toward data access legislation, he said: a flat-out data access bill, a provision in a more general bill on autonomous vehicles or privacy legislation that addresses data access.

    TIA is very involved in the effort in Massachusetts to amend the state's current Right to Repair law to include access to AV data, according to Mr. Littlefield IV. The association is working closely with the Auto Care Association (ACA) on this issue, which includes both legislation and a measure on the state's 2020 ballot, he said.

    "It is crucial for dealers to have access to this," he said.

    Other issues

    • The USTMA will continue to promote state legislation banning the installation of unsafe used tires on vehicles. Ohio and California approved USTMA-backed used tire bills in 2019, making them the third and fourth states after Colorado and New Jersey.
    • TIA is closely watching state efforts to require vehicle manufacturers to inform consumers of their rights under the Magnuson-Moss Warranty Act, which forbids manufacturers from voiding the warranty rights of motorists who use independent repair shops for repair and maintenance. The New Jersey Assembly passed a bill late in 2019 requiring auto makers to inform consumers of their Magnuson-Moss rights within 90 days of a vehicle purchase; the governor had until Jan. 14 to sign the bill.
    • The ASA will continue to fight state and local efforts to weaken or abolish state safety and emissions inspection regulations, as well as initiatives in cities such as Austin, Texas, to create zoning regulations that banish auto repair shops to distant suburbs.
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